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Canada to Scrutinize Teck Resources’ Coal Business Sale to Glencore-Led Consortium

By  |  November 15, 2023
Canada to Scrutinize Teck Resources’ Coal Business Sale to Glencore-Led Consortium

Canada’s Deputy Prime Minister, Chrystia Freeland, has announced that the federal government will closely scrutinize the recent agreement between Vancouver-based Teck Resources and a consortium led by Swiss mining giant Glencore PLC. The deal involves the sale of Teck’s 77% stake in its core metallurgical coal business to Glencore, with the remaining portion going to Japan’s Nippon Steel and South Korea’s POSCO, totaling a substantial US$8.9 billion.

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    Speaking to reporters in Toronto, Ms. Freeland emphasized the seriousness of the transaction and outlined the key factors that will be considered during the regulatory review process. These factors include safeguarding Canadian jobs, maintaining a Canadian headquarters, addressing environmental concerns, and respecting the rights of Indigenous people.

    Related: Barrick CEO Speaks Against Canadian’s Probe Into Glencore/Teck Deal

    Teck had initially considered spinning off its coal business, Elk Valley Resources Ltd., but the plan was abandoned due to insufficient shareholder support earlier in the spring. The current deal with Glencore marks a significant shift in strategy for Teck.

    Glencore had previously attempted to acquire Teck in its entirety, including the copper and zinc mines, but faced repeated rejections from Teck’s board. In April, Ms. Freeland, along with two other federal ministers, expressed reservations about Glencore’s proposed acquisition, highlighting the importance of retaining companies like Teck within Canada.

    The federal government will assess the transaction’s net benefit to Canada and evaluate whether it passes a national security test. Ottawa retains the authority to reject the deal based on either factor. This rigorous review underscores the government’s commitment to protecting Canadian interests, jobs, and environmental considerations in major business transactions.

    As Canada navigates this pivotal moment in its resource sector, the outcome of the regulatory review will undoubtedly shape the landscape of Teck Resources’ coal business and have broader implications for foreign investments in the country’s key industries.

    Source: The Globe and Mail